Innovation and an entrepreneurial attitude are necessary for every company, but assessing the risks associated with change is difficult. Chance & Intent offers a series of essays looking at the recent thinking in the field and if it does not provide definitive answers, it nevertheless has important ideas for executives and investors.
An early chapter by William Gartner and Jianen Liao analyses the nature of risk-taking, concluding that successful entrepreneurship lies not in the assessment of risk but in the evaluation of potential rewards against possible losses associated with change.
A central problem with business risk assessment is that unexpected events such as a natural disaster can throw plans off track. David Bodde (speaking, interestingly, from a background in engineering) looks at how real options analysis and scenario planning can help innovators manage the big bets that often have to accompany new technology ventures.
Several writers look at how experimentation in a controlled environment can be used to assess risk. The core idea is “fail fast, fail cheap, fail forward”.
The final section looks at open innovation systems, which have the potential to offer huge opportunities even while being highly disruptive. Robert Laubacher looks at the “collective intelligence genome”, arguing that it is likely to prove as important to innovators in coming decades as venture capital has been in the past few.
These are interesting, if sometimes complex, concepts. At times the academic origins of the authors is a problem, with real-world applications of the ideas difficult to see. Yet if you want to get ahead of the intellectual curve in the business of understanding risk, this book is worth the effort.